#Fibonacci is not only an ancient Italian mathematician, but also a powerful tool in the hands of traders, penetrating the secrets of financial markets. Let's dive into the fascinating world of Fibonacci numbers and their impact on trading.
Definition of the Golden Ratio Based on the Fibonacci number sequence, the Golden Ratio (or Golden Number) is approximately 1.618. This number becomes the basis for a number of financial instruments, including in technical analysis.
Fibonacci at #trading :
Application Examples Fibonacci Retracements: Traders use retracement levels (38.2%, 50%, 61.8%) to identify possible support and resistance levels on price charts. Fibonacci Extensions: Extensions help identify potential price targets. For example, 161.8% and 261.8% can indicate possible levels where the trend may move.
Comparison with Other Technical Indicators
#MA (Moving Average): Unlike MAs, Fibonacci provide specific levels that a trader can use to make decisions.
#RSI (Relative Strength Index): RSI helps determine overbought or oversold conditions. Fibonacci points identify specific levels where a trader can expect a trend change.
Conclusion
Fibonacci in trading is not just numbers, but magic that penetrates the dynamics of financial markets. Using them in combination with other tools, traders can uncover potential entry and exit points, making their trading more informed and effective.
